Rig counts, but not jobs, up in Texas

Jan. 19 (UPI) -- Exploration and production in the Permian shale basin in Texas is contributing to more output, but not more jobs, data from a federal reserve bank said.

The Federal Reserve Bank of Dallas said production in the Permian shale basin increased by about 66,000 barrels per day between November and December to reach an average 2.73 million bpd.

"Strong production numbers are in line with the fourth-quarter Dallas Fed Energy Survey, which saw an acceleration from 14.3 to 33.7 in its oil production index," the report read. "Today, the Permian Basin is producing 29 percent more barrels per day than in December 2016."

A survey of 134 energy firms from Dec. 13-21 by the Dallas Fed showed an index measuring confidence had its first sign of reduced uncertainty since the first quarter of 2017. Most of that optimism came from drilling services companies, those that were hit hard by the market downturn in early 2016.

The Dallas Fed said the rig count, a reflection of exploration and production, increased 10 from November to average 398 in the Permian basin in December. That represents the vast majority of the rig count in Texas, which, according to drilling services company Baker Hughes, dropped two in the week ending Jan. 12.

In November, Dallas Fed Assistant Economist Amy Jordan said the market is tightening up and there might not be too much room left for further economic growth. The entire oil and gas sector in the Dallas Fed's district added 1,600 jobs in November. However, since January 2017, oil and gas extraction added only 1,300 new jobs.

For labor in general, the Permian basin saw its unemployment rate increase in November, though it was still below the Texas jobless rate of 3.8 percent.

The Texas Alliance of Energy Producers, a state trade group, said in an index measuring various parts of the industry that employment in the oil and gas extraction sector declined 1.5 percent year-on-year from November.

Neither the Dallas Fed nor the Texas Alliance of Energy Producers provided an explanation for the decline in employment, though shale producers in general are learning to do more with less.

Respondents to a December survey from the bank said they expected West Texas Intermediate, the U.S. benchmark for the price of oil, to be around $58.98 per barrel by the end of 2018 on average. In pre-market trading Friday, WTI was around $63.50 per barrel.

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